Buying a health insurance cover? Know some important factors

2. Buying a health insurance cover? Know some important factors Medical emergencies can cause some serious financial crisis. You may have to borrow money from friends or relative, or keep things like gold, silver, property papers, etc. mortgaged to arrange necessary finances. Thus, a medical emergency cause triple hit of physical, mental and financial stress. Therefore, a health insurance policy is necessary to protect the financial health and not merely as a tax savings tool. Let’s understand few important factors to be considered while owning your health policy:

3. invests When Young Young days are the most beneficial days of purchasing a policy. Since young people are deemed healthier and there are fewer risks involved you get the policy at a cheaper rate compared to aging days. Buying a policy with lifetime renewability makes sense, otherwise if the policy ends at old age, it will be difficult to get a new one. Additionally, younger individuals tend to accrue a no-claims bonus as they are unlikely to seek medical attention. Cashless Vs Reimbursement During cashless treatments, the insurance company has a list of approved hospitals where a policyholder can seek treatment in these empanelled hospitals at free of costs.

4. Waiting Period A pre-existing condition is a disease that exists before the purchase of a health insurance policy. Insurers need to wait for around 3 to 5 years for the disease to be incorporated in the plan. If there are two insurance providers and one is charging a higher premium than the other, but has a shorter waiting period, then it makes more sense to purchase its policy. Sub-Limit It is the extent to which an insurer will pay for claims arising from associated medical expenses. Your expenses like cost of medicine or cost of surgery will be limited to an amount determined in the sub-limit. For example, the doctor’s fees could be limited to 2% in a health plan worth Rs 4 lakhs. The insured will, therefore, be paid no more than Rs 8,000, even if the doctor’s fees amount to Rs 10,000.

5. Claim Settlement Ratio Claim settlement is the total payments made by health insurance firms against the total number of claims received by it. If a company has a high claim settlement ratio, it makes sense in buying policy from them. But, one should keep in mind that claim settlement ratios are influenced mostly due to factors like fraudulent claims. Cooling-off Period During the first 30 days, the insurer will not cover the cost of hospitalization due to illness. The period is termed as ‘cooling-off’ period. However, a policyholder must make sure that the expenses of hospitalization due to accident are covered.

6. Review the Policy: Once a health insurance policy has been purchased, it is very important to review it from time-to-time and keep an eye on other providers in the market. Due to the IRDA’s guidelines on insurance portability, a policyholder will not have to go through a waiting period for pre-existing diseases if he/she decides to switch to another insurer. So, its better to read the policy carefully and utilized them for your utmost benefit.

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